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A license agreement is a legal document used to harness the significant value of intellectual property.  Intellectual property is a term that refers to creations of the mind, such as inventions, literary and artistic works, and symbols, names and images used in commerce.  Intellectual property can be one of the most significant assets for a business or individual. According to a top reporting agency, retail sales of licensed products worldwide exceeded $260 billion in 2014 alone.   According to the United States Patent and Trademark Office statistics, Intellectual Property intensive industries accounted for $6.6 trillion in value added in 2014.   New York City and the Tri-State Area are hubs for many companies licensing their products.

A licensing agreement is an agreement to licensee the rights to use, produce or sell goods or services using the intellectual property owned by a party.  A licensing agreement must be carefully drafted to ensure that a party’s rights are adequately protected. When drafting a licensing agreement, a person drafting the agreement must carefully consider several key issues.

For example, a drafter must carefully determine the scope of a party’s intellectual property rights before drafting documents. Another consideration is which party will be responsible to pay the costs and fees of maintaining the intellectual property, who will pay for costs to enforce and defend intellectual property if litigation arises, and who will have decision making authority. Yet another consideration is whether the agreement is to be exclusive or non-exclusive. Another significant consideration for a trademark licensing agreement is a “care and control provision”.  A “care and control provision” is very important for a trademark owner/licensor because a trademark not adequately policed or controlled may be subject to invalidation by another party.  These are only a few of the issues that must be addressed when drafting a licensing agreement.

In addition to law surrounding intellectual property, it is critical for a person drafting a licensing agreement to have a good technical understanding of the intellectual property itself as well as the business arrangement contemplated by the parties. The attorneys at The Plus IP Firm are engineers and patent attorneys whose practice is focused on intellectual property. The attorneys at The Plus IP Firm have prepared many licensing agreements on behalf of their clients. If you have any questions regarding licensing your intellectual property or the intellectual property of others, please contact one of the attorneys at The Plus IP Firm.

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